The National Alcohol and Liquor Factory (NALF), a key state-owned enterprise in Ethiopia’s beverage industry, has embarked on a significant long-term expansion by securing an 80-year land lease in the rapidly developing Sheger City. According to the company’s financial report dated June 30, 2025, NALF acquired a 20,148 square meter industrial site from Sheger City Administration through an agreement finalized on August 17, 2024, for approximately 92.4 million birr.
Buoyed by a strong financial foundation and increased domestic capital support, this strategic investment is poised to substantially elevate the factory’s production capacity for decades ahead. The report shows NALF’s total capital equity rose from 786 million birr in the prior year to 803 million birr in 2025. Additionally, the total value of the company’s property, plant, and equipment exceeded one billion birr, reaching over 1.058 billion birr.
Reflecting ambitious production goals, the factory’s raw material stock swelled by nearly 70 percent compared to the previous year, totaling over 123 million birr. This growth underscores NALF’s commitment to accommodating increased output at its new Sheger City facility. The company’s paid-up capital currently stands at 622 million birr and supports expansion and modernization projects at its Mexico and Sebata branches.
Despite strong asset growth, NALF relies heavily on short-term loans to manage operational cash flow tied to raw materials and salaries. As of June 30, 2025, the factory carried an overdraft balance of 96.6 million birr against a 150 million birr facility obtained from the Commercial Bank of Ethiopia in April 2023, subject to a 14% annual interest rate. CEO Mesfin Abate explained that the Sebeta factory building, used as collateral for the overdraft, illustrates the firm’s use of dynamic financing tools to balance production costs and revenues.
Additional financing includes a 50 million birr short-term loan from Awash Bank at 15% interest due within one year. While such loans are common, the persistent use of relatively costly debt alongside capital projects, such as constructing a new factory in Mekanisa and refurbishing the Sebata branch, raises questions about operational efficiency.
Nonetheless, NALF posted a 14.7% increase in net profit for the fiscal year, reaching 307.4 million birr compared to 268 million birr the prior year. Total sales amounted to 2.7 billion birr, an increase of over 200 million birr. Founded in 1992 with the goal of producing a full range of alcoholic beverages for domestic and export markets, the factory’s total assets are reported at 803.4 million birr as of June 2025.
